The London Borough of Newham Council’s mandatory scheme, launched in January 2013, for all private landlords to be licensed, irrespective of the type or size of property, has so far proven to be a success according to the Council.
If landlords in the area obtained their licenses before the end of January 2013, a 5 year licence would have cost them £150 but those who chose to obtain them later are paying £500. The penalty for failure to apply for a licence can result in landlords being fined up to £20,000 for each property they rent out.
At the beginning of February 2013, Newham Council sent warning letters to the landlords of over 2,300 properties resulting in 50 per cent progressing with licences.
In addition, properties without licenses and HMO offences are the subject of 110 legal cases, and the Council has issued over 40 cautions, levying £300 for enforcement fees.
The success of the scheme has caused other city councils to consider implementing it in their area but this news is not being received well by agents and landlords, particularly in Nottingham where the council is considering charging £980 per property which will include around 3,500 Houses in Multiple Occupation (HMOs).
A spokesman for the EMPO (East Midlands Property Owners), Giles Inman, intimated that in the long term this scheme would damage “the very tenants it was designed to safeguard” since an increase in the costs would ultimately be passed on to the tenants as rents became higher. He also stated that the scheme could potentially create greater homelessness for those in receipt of benefits “at a time when the city is already experiencing a housing crisis.”
The view of the EMPO is that if the scheme in implemented in Nottingham rents will rise and evictions increase as landlords will have no option other than to spread the additional cost across their property portfolios, or have fewer tenants in the HMOs in order to avoid the high cost of licensing them.
Of all households in the UK, those in Nottingham have the lowest disposable income according to the Office for National Statistics.
Roger Lancaster, who is a member of the EMPO and a landlord said that the additional licensing scheme wouldn’t change the way in which anti-social problems were handled including noise, bins in the streets and house disrepair.
He added that whilst the licensing was directed at a small minority of landlords who would be unlikely to register in any event, the majority operated legitimately. He also felt that Nottingham City Council had sufficient powers available to it to address anti-social behaviour issues.